Hard math


Medicare’s complex formulas and penalties mean physicians rely on Medicare and its contractors for accuracy, says Donna Kinney, director of research and data analysis in TMA’s Division of Medical Economics. Yet Medicare’s recent miscalculations regarding nonparticipating (non-PAR) physician fees incorrectly led many doctors to believe they were overcharging their patients. Even for practices that have the staff or the time to detect Medicare’s errors — which most don’t


— it’s no simple task. “You have to know the exact steps to take in the exact order and know the sequence of applying the discounts and when and where to round,” Ms. Kinney said. Take the example below (simplified for demonstration), showing how Medicare calculates fees for


non-PAR physicians subject to penalties under the Physician Quality Reporting System (PQRS) and meaningful use of electronic health records (EHRs) program.


Non-PAR, nonassigned claim with EHR and PQRS penalties Original fee schedule amount:


5% negative adjustment for non-PAR status: 1% EHR negative adjustment: EHR adjustment total: MPFS* allowed amount:


1.5% PQRS negative adjustment: PQRS adjustment total: MPFS* allowed amount:


Limiting charge allowed:


$100.00


$5.00 $0.95 $5.95


Calculation


($100 x 0.05) ($95 x 0.01)


$94.05 ($100 − $5.95) $1.41


$92.64 $92.64


$106.54


($94.05 x 0.015) ($94.05 − $1.41)


($92.64 x 115%)


*Medicare Physician Fee Schedule Find more information on these calculations in this Centers for Medicare & Medicaid Services


Medicare Learning Network article: tma.tips/LimitingCharge. Also visit Novitas’ (Texas Medicare contractor) website under the Fee Schedule Lookup Tool at tma.tips/FeeLookupTool.


July 2015 TEXAS MEDICINE 29


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